Patrick Boyle On Finance The UK is a Warning to the Rest of the World
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Mar 9, 2026 A forensic look at how Britain slid from industrial leader to a productivity puzzle. They discuss planning red tape, punitive tax codes and brain drain. Conversation covers stalled homebuilding, a youth inactivity crisis and high energy costs. The piece examines how underinvestment, labor rigidity and zero-sum politics have chained growth prospects.
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Productivity Gap Driven By Low Capital Per Worker
- The so-called productivity puzzle is explained by low capital per worker and chronic under-investment.
- UK workers have roughly a third less capital (tools, machines, software) than peers, and infrastructure gaps (many cities lack mass transit) shrink productive labour markets.
Tax Cliff Edges Are Pushing Skilled Workers Out
- The UK tax system contains cliff edges that create marginal rates above 60% and disincentivise extra work.
- Examples include doctors avoiding extra shifts to stay below £100,000 to retain free childcare, causing earnings bunching below thresholds.
Post-Brexit Labour Rigidity Harms Responsiveness
- Post-Brexit migration policy replaced flexible EU labour with rigid, sector-tied visas, reducing labour market responsiveness.
- The UK saw the fastest expansion in low-skilled migration on visas tied to specific sectors like social care, creating mismatches and shortages.
